Elizabeth City State University faced a brief existential crisis last month when North Carolina lawmakers toyed with the idea of closing the historically black institution. The lawmakers backed off, but the episode was just one in a series of challenges facing the country’s 40 public historically black four-year colleges and universities.

Enrollment declines, cuts to government financial aid, leadership controversies and heightened oversight are working together to threaten some HBCUs in new ways and perhaps even jeopardize their existence, according to people who study, work with, and have led HBCUs. Some private black colleges, like other tuition-dependent private institutions, are also struggling, but public HBCUs are being tugged at by a variety of forces, old and new.

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Some of the problems are, of course, historic. Public black colleges were created as part of segregated higher education systems, were starved for resources for much of their history, and generally lack the academic facilities, faculty salary pools, and other features found at top public universities. In an era when state leaders are talking about degree completion and speeding up graduation times, many public HBCUs remain proud of historic missions that include taking chances on students who went to poor high schools and who may face long odds.

When Tiffany Jones, an analyst at the Southern Education Foundation, visited one public HBCU to talk about the effects of performance funding on the university, officials there told her that it was “because of race that they were being targeted by the state system of higher education and their history of limited resources had provided them with limited ammunition to fight back.”

Hit Hard by Changes in Grant, Loan Programs

Other obstacles are wholly new. In 2011 the federal government limited the ability of students to use Pell Grants to a total of 12 semesters. Before, Pell had covered up to 18 semesters of college. The change was significant for HBCU students, who take longer on average to finish, and, in turn, HBCUs themselves, which lost tuition revenue because the students couldn’t afford to keep attending. About 85 percent of HBCU students receive Pell Grants, and only about a third of HBCU students graduate within six years, said Marybeth Gasman, a professor of higher education at the University of Pennsylvania who studies colleges that educate minorities.

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The federal government has also tightened eligibility for Parent PLUS loans, which were used by many HBCU students’ families to pay for college. HBCU leaders have called the changes, also made in 2011, a “crisis” that limits students' access to higher education.

Other accountability measures by states and the federal government could punish HBCUs that have low graduation rates or have students who do poorly after they graduate. While it may be too soon to tell, HBCU watchers warn the effects could be disastrous.

“It’s going to be ugly. It could be a bloodbath,” said Johnny C. Taylor Jr., the president and CEO of the Thurgood Marshall College Fund. Forty-seven HBCUs and predominantly black colleges are members of the fundraising organization.

Taylor said HBCUs, sometimes with fewer resources than predominantly white publics, are trying to educate students with less preparation for college—and now they’re going to be punished for not getting great results.

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“You’re asking me to do more with kids who have more need with less resources and then you’re going to hold me accountable if I don’t retain them and graduate them in a shorter period of time,” he said, referring in particular to the effects of the cuts to Pell.

Another rule that yanks federal financial aid from colleges with a high default rate has previously exempted HBCUs from punishment. That’s set to change. Next year HBCUs risk running afoul of federal borrowing thresholds. New standards would eliminate federal aid eligibility if a third of borrowers defaulted within three years of when they began to repay their loans.

Two public HBCUs—Langston University in Oklahoma and Central State University in Ohio—have default rates of more than 30 percent for students who graduated or started paying back their loans in 2010. At Langston, the university with the higher default rate of the two (32.5 percent), officials predict they will be able to avoid losing federal aid dollars.

Senior Langston officials said they have taken action to bring down the default rate for the 2011 cohort to 25.6 percent. Getting below 30 percent for one year resets the clock on losing federal aid.

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Langston President Kent J. Smith said the university has tried to educate its students that defaulting on their loans could hurt the university too. “We’re going in the right direction and we have to keep it that way,” he said.

Taylor, of the Thurgood Marshall fund, said HBCU presidents are quite worried about the penalties for high loan default rates. He isn’t sure the colleges should be blamed, particularly because unemployment remains high and colleges can’t exactly control whether or not their graduates get jobs.

Speaking from the perspective of an HBCU president, Taylor said, “We did our part. But because the job market, the economy, won’t absorb them, they are unemployed, can’t pay the student loans, and don’t have parents who can help them pay them—because of the Great Recession—now I, Mr. President, am going to be penalized after I do my part.”

Other public HBCUs are struggling to get students on campus in the first place.

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The scare for Elizabeth City State came after state lawmakers wanted to study closing Elizabeth City State because of its enrollment declines. The university has lost more than a quarter of its full-time equivalent enrollment since fall 2010, according to Moody’s Investors Service, which recently downgraded the university’s bond ratings.

North Carolina lawmakers eventually backed away from studying Elizabeth City State’s closure—for now. North Carolina state Rep. Annie Mobley, a graduate of Elizabeth City State who opposed the plan to study closing the university, said in a telephone interview that existential threats to the university are “not going to go away.”

Daniel J. Hurley, a vice president for government relations and state policy at the American Association of State Colleges and Universities, said public HBCUs are facing “severe challenges” just as the country is focusing on trying to provide access to low-income, minority, and first-generation college students.

“We need all oars in the water, one of them being the public HBCUs,” he said.

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Elizabeth City State is far from alone in having to deal with enrollment declines. Of 13 public HBCUs—including Elizabeth City State—that Moody’s rates, at least six have seen notable enrollment declines that are affecting their financial health.

At least part of the problem for HBCUs is a result of more opportunities for black Americans: HBCUs, once just about the only way a black American could get a higher education, no longer have that monopoly on black students because of desegregation. To be sure, even the wealthiest of private black colleges don’t have the endowments of their predominantly white counterparts. But private black colleges can set their own missions, and need not shift gears because of state politics or policies.

Texas Southern University’s enrollment fell 9.3 percent to 7,744 full-time equivalent students last fall, according to Moody’s. The drop cost the university $3.3 million in tuition and other revenue. State appropriations were also cut by $2 million. In April the university had only enough cash on hand to operate the college for 42 days, according to Moody’s. Texas Southern, which did not respond to repeated requests for comment, has elsewhere blamed the 12-semester cap on Pell for some of its problems.

Lincoln University in Pennsylvania shrunk by 7 percent this fall alone—to a total of 1,875 students—after only 17 percent of the students it admitted decided to show up.*

Florida A&M University’s enrollment fell 10.6 percent last fall, too, though some of that may have had to do with a hazing death and being on probation from its accreditor, according to Moody’s.

Such enrollment declines—driven in part by the cut to Pell—mean that public HBCUs “can’t quite sustain” their revenues, even if they are in states that are providing healthy support for higher ed, said Moody’s analyst Erin Ortiz. And, “just by virtue of their mission,” Ortiz said, the HBUCs a have “smaller pool of students as well.”

Some HBCUs are looking to expand their enrollment base. Three public HBCUs—West Virginia State University, Bluefield State College in West Virginia, and Lincoln University in Missouri—already have more white students than black students.

At Langston, President Smith said he is working to recruit Hispanic and white students. When he buys student data from ACT—which collects information on high school students and then sells the data to college recruiters—Smith doesn’t single out students based on race.

“Even though we’re an HBCU, the reality is that if we want to grow and strengthen ourselves and strengthen the Langston educational experience, diversity is a good thing—now, I will tell you not everyone agrees with that, but I will tell you diversity is a good thing,” Smith said.

“It’s going to be ugly. It could be a bloodbath.”

John C. Taylor Jr., Thurgood Marshall College Fund

Edward Fort, the president emeritus of North Carolina A&T State University, a public HBCU, edited a book last year titled Survival of the Historically Black Colleges and Universities. He said talk about their future and survival is much more common today than just a few years ago. He blames disproportionate funding for black colleges, as well as a variety of social factors. When it comes to funding, he points out that Johns Hopkins University gets more federal research funding than all HBCUs combined.

“That kind of fiscal disproportionality has to cease, so we’re going to have be twice or even three times more aggressive than we have in the past with regards to federal procurement,” Fort said.

HBCUs have to become more aggressive in their search for federal, philanthropic, and corporate money, Fort said. But he also blames a variety of social factors: There’s the “plight of the black male,” he said, which lowers expectations for black men to get a good education. HBCUs, like other colleges, now face the “twin anvils of internationalized politics and globalization,” which increase the competition they have for students. And HBCUs still have to deal with the “vestiges” of racism, he said, citing the brief threat to Elizabeth City State.

“That’s deadly,” he said, referring to the enrollment loss there. “But, on the other hand, I wonder if that kind of legislation would have been passed if the institution involved had not been an HBCU—that’s just a question.”

Job and Program Cuts

Revenue shortfalls have forced HBCUs to eliminate jobs and, in some cases, programs, which makes it more difficult to attract more students. Among them:

North Carolina Central University announced in April it would eliminate 55 positions, according to theHerald-Sun newspaper.

South Carolina State University announced in May plans to lay off 90 part-time employees, according to theTimes and Democrat newspaper, and has had trouble making payroll. A state investigation found the university paid bills with funds meant to help poor families. The university did not respond to requests for comment.

HBCU watchers are particularly worried about the effects of performance funding systems in states, as well as a college ratings plan that the Obama administration has hoped to tie to federal aid.

Jones, the analyst at the Southern Education Foundation, is releasing a paper later this month on the “necessary considerations and possible measures” states must take as they deploy performance-based funding models that apply to HBCUs. “The campuses that are more likely to lose money are the campuses that need it the most,” Jones said in a telephone interview.

She and others said the effects of performance funding could take a few years to see, but the concern now by HBCU leaders is real.

Gasman, the University of Pennsylvania researcher, said performance funding models that do not take into account students’ backgrounds will hurt HBCUs, but a performance funding model that does take could actually benefit them. Tennessee has a plan that might help HBCUs, Gasman said, and North Carolina is working on one.

Other HBCUs have to deal with management issues. There are seven presidential vacancies at public HBCUs since August, according to Alvin J. Schexnider, a former public HBCU president and author of Saving Black Colleges, a book on HBCU leadership.

Schexnider, a former chancellor at Winston-Salem State University, a public HBCU in North Carolina, argues that black colleges now have little or no margin for error, so they need top-notch boards and presidents. He warns against trustees and governing boards fighting with presidents, failed HBCU presidents who have been recycled and hired by another HBCU, and HBCU leaders of all kinds who fail to adapt to a changing world.

“I think we’re in a watershed moment right now because the sources of state and federal support have been declining and they will continue,” Schexnider said.

Fort, the former president of North Carolina A&T, is planning a second book on HBCUs that will focus on leadership, too. Without good leaders right now, he said, HBCUs may be doomed.

“For leadership, it means that the leader who has his or her myopic head in the sand is whistling Dixie in the pine trees,” he said. “They will not survive, they absolutely will not survive.”

*Correction, June 30, 2014: This article originally misstated that enrollment at Lincoln University in Pennsylvania fell by 1,875 students. It fell to a total of 1,875 students. (Return.)